Ride-hailing company turned logistics conglomerate Uber Technologies is again rearranging its portfolio in an effort to adapt. The company says it will sell a substantial stake in its unprofitable logistics arm Uber Freight.
The company, which had previously moved to generate revenue from all forms of transport, said it would be selling $500 million in shares in Uber Freight. It sold its micro-mobility subsidiary Jump and doubled its investments in its delivery business. This included its recent acquisition of competitor Postmates.
According to Uber, a group of investors led by New York-based investment company Greenbriar Equity Group has committed to purchasing the company's Series A preferred stock in Uber Freight. The transaction values the logistics company at around $3.3 billion. Under the deal, Greenbriar's managing partners Jill Raker and Michael Weiss will be joining Uber Freight's board of directors.
Uber stated that it will still retain majority ownership of its subsidiary. The company added that it will use the proceeds of the share sale to expand its transport network and to broaden its markets. The company originally launched Uber Freight back in 2017 - which it later spun off into a separate business unit.
Uber Freight quickly gained momentum, prompting Uber to spend billions of dollars. The service later became available in Europe and Canada, with Uber establishing operations in Chicago. Since then, the company has hired hundreds of workers. Uber said last year that it would hire 2,000 more employees.
The company's expansion was halted following the spread of the pandemic. Uber was forced to pull out of Europe as a result. It sold off its local business in the region to German-based sennder GmbH in an all-stock transaction.
Since its inception, the company has remained unprofitable. For its second quarter this year, Uber Freight reported a loss of around $49 million on profits of $211 million. This was an improvement from the $52 million loss the company reported over the same period in 2019.
